Mitsubishi UFJ Financial Group (MUFG) has acquired Japanese robo-advisor WealthNavi in a deal worth $664 million.

WealthNavi has developed an automated platform for asset management, featuring robo- advisors that provide investment help for a diversified portfolio of exchange-traded funds (ETFs). Available on a subscription basis, the platform also provides solutions for automated portfolio construction, periodic rebalancing, dividend reinvestments and tax optimisation.

The company is listed on the Tokyo Stock Exchange’s Growth Marker, with assets under management exceeding 1.3 trillion yen (approximately $8.7 billion) as of July 4, 2024.

Following the acquisition, MUFG said it will be able to collect customer data, including customer age, family make up, and purchasing history, to bolster its services and provide better financial support for each customer’s individual life events.

WealthNavi’s platform assesses a customer’s risk tolerance level based on the their answers to five questions including age, amount of financial assets held, and purpose of asset management.

It then proposes a wealth management plan tailored to the customer’s risk tolerance level, automatically managing the customer’s assets according to the selected wealth management plan.

MUFG’s buyout of WealthNavi comes after it acquired a stake in the platform exceeding 15 per cent in February. At the time, MUFG said the acquisition aimed to accelerate the development of MUFG's asset management capabilities and provide seamless, automated financial solutions to both retail and institutional clients.

It added that the initial investment was part of a strategic move to integrate advanced AI-driven tools into its platform.

The majority acquisition reflects the growing trend among traditional financial institutions to invest in digital solutions to provide tailored financial services, with other firms including BlackRock and Morgan Stanley respectively recently investing in robo-advisory specialists FutureAdvisor and Etrade.

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